Consumer confidence continued to rise in September, after a big increase in August. Currently, consumers are quite optimistic about both the current situation and the near-term outlook.
The Consumer Confidence Index, reported by the Conference Board, increased to 138.4 in September, from 134.7 in August. It has surpassed the 2007 peak of 111.9 and spiked to the highest level since October 2000. Both the present situation index and the expectations index rose in September. The present situation index rose by 0.3 point from 172.8 to 173.1 and the expectations index jumped by 6.0 points from 109.3 to 115.3. The September increase in consumer confidence was mainly generated by an increase in the expectations index.
Consumers’ assessments of current business conditions improved. The shares of respondents rating business conditions “good” increased by 0.9 percentage point from 40.5% to 41.4%, while the shares of respondents reporting business conditions “bad” and “normal” declined by 0.2 percentage point and 0.7 percentage point, respectively.
Meanwhile, consumers’ assessments of current employment conditions were mixed. As the share of respondents reporting that jobs were “plentiful” increased from 42.3% to 45.7%, and those reporting jobs were “not so plentiful” decreased from 45.6% to 41.1%, those reporting jobs were “hard to get” increased from 12.1% to 13.2%.
Expectations of business conditions over the next six months improved. In September, 27.6% of respondents expecting future business conditions to be better, increasing by 3.2 percentage points from 24.4%, while the share of respondents expecting business conditions to worsen declined by 1.9 percentage points from 9.9% to 8.0%.
Expectations of employment over the next six months were more upbeat than in August. The share of respondents expecting “more jobs” in the coming six months increased by 1 percentage point from 21.5% to 22.5%, while the share of respondents expecting fewer jobs decreased by 2.2 percentage points from 13.2% to 11.0%.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home increased from 6.3% in August to 6.6% in September, perhaps offsetting some market concerns about declining housing affordability. The share of respondents planning to buy a newly constructed home and an existing home increased to 1.4% and 4.3%, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home declined by 0.5 percentage point to 0.9%. Despite the monthly volatility, the trend in the share of respondents planning to buy a home within six months has been rising.